Spotify Shares Climb on Stronger User Adds and Improved Margins
Spotify reported third-quarter paying users of 306 million, adding 6 million and beating its own forecast, while total monthly active users reached 788 million. Revenue was about €4.97 billion, gross margin hit a record 33%, and operating income rose 15%. The streaming company gave an upbeat fourth-quarter profit outlook, citing AI-driven personalization and audiobook expansion, and its shares jumped more than 10%.
Spotify’s quarterly update showed premium accounts rising by 6 million to 306 million, about 1 million above its own target, with gains across all regions. Monthly active users climbed 11% year over year to 788 million, while revenue reached roughly €4.97 billion.
Operating profit rose 15% to €672 million, slightly ahead of guidance, and gross margin reached a record 33%. Earnings per share fell short at €2.48 versus €2.80 expected, as lower finance income and higher taxes offset operating strength; free cash flow was €735 million.
Spotify’s stronger margins and subscriber gains may give it more room to invest in personalization and audiobooks, potentially shaping how listeners discover content and how authors and publishers reach audiences. Artists and rights holders could see evolving royalty and promotion dynamics, while subscribers may encounter changes in pricing or features. Employees and advertisers could also be affected as spending shifts toward AI and marketing. These outcomes remain uncertain and depend on competition, regulation, and user response.